Developing economies face a confluence of pressures, each of which implies large investment needs. They must create jobs for rapidly expanding populations, boost resilience to external shocks and the effects of climate change and build the infrastructure required for long-term growth. And yet, with concessional finance shrinking, borrowing costs ballooning and international capital markets remaining volatile, funding these investments is harder than ever.
To pursue ambitious development agendas with limited fiscal space, developing economies must borrow more strategically. Rwanda's recent financing partnership with the World Bank Group shows what this could look like.
